Broad reach
In a difficult year for Asia’s equity capital markets, one bank found opportunities to raise funds for its clients by thinking differently and moving quickly. For making the most of short windows with its spot-on judgement, Citigroup is IFR Asia’s Equity House of the Year.
Citigroup led the way in Asia’s equity capital markets in 2023, securing key roles on the biggest capital raisings of the year and showing its strength across a broad mix of markets and products.
Equity fundraising activity in Asia Pacific ex-Japan fell 22% in 2023 to US$210bn, as offshore China activity continued to be muted.
Still, there were bright spots. India’s ECM volume was up 61% to US$31.2bn, while Indonesia had a big year for IPOs, and Taiwan and South Korea also saw sizable follow-ons and convertible bond issues.
Citi’s deep corporate and commercial bank presence across the local markets in Asia Pacific gave it a unique advantage over competitors and an unrivalled depth to its client relationships. The geographic diversity also helped mitigate regulatory headwinds.
The US bank led important transactions in China, India, Taiwan, South Korea, Indonesia, Australia and Singapore.
“Our competitors don’t have the geographical diversity that we have. We are the strongest and most diversified in terms of footprint and products,” said Kenneth Chow, head of Asia north/Australia and Asia south equity capital markets products and execution.
Citi’s breadth of business in India, where competition is intense, was particularly impressive. It worked on several high profile IPOs including Tata Technologies, Honasa Consumer, RR Kabel and Concord Biotech.
The Rs30.5bn (US$367m) Tata Tech IPO, in which Citi was a joint lead manager, is expected to reopen India tech listings after the stock more than doubled from its issue price. The deal received 7.4 million applications, setting a record for Indian IPOs in that regard.
Citi also managed India’s first retail real estate investment trust IPO, the Rs32bn Nexus Select Trust float, as well as a Rs88bn qualified institutional placement in Bajaj Finance, SoftBank’s and Carlyle’s blocks in Delhivery (totalling Rs16.5bn) and Ant Group’s Rs20bn sell-down in Paytm.
Quick and accurate market judgement differentiates Citi from its competitors.
“You need to be on your toes execution-wise in this kind of market. If you let investors down or go the wrong way, you are not going to get a great reaction,” said Udhay Furtado, head of Asia north/Australia and Asia south ECM origination and solutions.
Mobile game developer Netmarble’s W524bn (US$397m) sell-down in Hybe, the South Korean company that manages K-pop group BTS, is a perfect example.
A day after South Korea decided to implement an unexpected short-selling ban, sole bookrunner Citi launched the block on November 6 following a 5% surge in the benchmark Kospi 200 Index.
The deal drew a strong response as many hedge funds saw the sale, which came at an 8% discount, as a chance to cover their short positions. The stock closed at W215,500 on November 7, 2.9% above the disposal price of W209,400.
Two days later, Citi, again single-handedly, arranged a US$40m block in South Korean gaming developer Krafton.
The bank also captured another crucial trend of investment-grade bond issuers turning to the equity-linked market for funds amid high interest rates.
Citi, as joint global coordinator, helped South Korean chemicals maker LG Chem raise US$2bn from an exchangeable bond with LG Energy Solution’s shares as underlying. The deal is the largest international EB ever in Asia Pacific and the biggest ever equity-linked transaction in the country.
Its unparalleled expertise in equity-linked products was also highlighted by Taiwan Cement’s US$805m equity combo – a US$420m green convertible bond, the first from Taiwan, and a US$385m offer of global depositary shares.
Other trophy transactions included a HK$11.8bn (US$1.5bn) top-up share placement for Chinese sportswear company Anta Sports Products, the Rp10trn (US$643m) Indonesia IPO of nickel producer Trimegah Bangun Persada, a A$1.1bn (US$736m) equity raising for Australian packaging maker Orora and a S$397m (US$298m) block in Singapore Airlines for Temasek Holdings, the state-owned investor’s first block trade in the city state in over a decade.
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